Tax

When we rent premises to be used in a business activity ( office, garage, warehouse, shop….) tax regulations puts the tenant under the obligation to withhold part of the payment due to the owner, called retention, and pay it directly to Spain’s Tax Agency in concept of owner’s own tax.

When an individual or company buys an asset that will have a utility life over a number of years the tax system does not allow for the deduction of its cost as an expense in the year in which it was purchased.

If working from home putting your rent as a business expense might be an option. Is it always worth-doing? This is not a straight forward issue. You rent your house with residency purposes and therefore IVA is not included in the monthly payment. That is not so when you rent for business purposes.

Tax liability is one of those things that starters may find difficult to understand. From the very beginning there is need to pay some tax.! The most frequent payments you might need to do are: IVA, income tax and “retention”. Learn how they work.

At the time of setting up a new business it is important to make a good choice of the legal form of our enterprise. There are two distinctive options: trading as a self employed individual(Autonomo) or as a Spanish limited company (Sociedad Limitada)